Target Case Study: Emerging Through the Challenges of the Future

Target is well-known for its
"Expect more, pay less" philosophy, which gives customers quality products
and services at affordable prices.

During a time of an economic
recession and a new CEO, Target is trying to maintain its unique identity
while still being competitive against competitors such as Wal-Mart.

The best way for Target to
improve its competitive edge against competitors is to modify its message
of "Expect more, pay less" motto.

Instead of just sending the
message of paying less for good quality, Target should also show customers
that they deserve these products and services, no matter their income.

Problems/Issues

Â·The
central problem for Target is maintaining their goal of being chic at
affordable prices against a weakening economy and competitors who have an
advantage over them when it comes to price.

Â·Another
issue is that Target's motto of "Expect more, pay less" can be
contradictory.

Â·Shoppers
perceive Wal-Mart to be cheaper than Target, even though Target prices are
within one to three percent of Wal-Mart prices.

Â·One
last problem is that Target's pioneering efforts to have high-fashion designers
do not seem as innovative anymore because other stores are beginning to
collaborate with high-fashion designers as well.

Alternatives

Â·The
first alternative to these problems is for Target to have a strategy that
focuses more on the "pay less" motto.They can portray Target as a more price sensitive store, and make ads
that focus more on their low prices of clothes, food, and commodity items.

oFor:This presents a great opportunity for Target
to tap into some of the customers who shop at places such as Wal-Mart.Target may have a chance to take away some of
the market share from Wal-Mart during this economic recession.

oAgainst:Wal-Mart owns the message of "lower prices,"
and this approach could pose too much of a risk for the branding of
Target.There is a chance that Target
could lose its advantage in its current strategy of emphasizing quality as a
reason to shop here, not because of low prices.

Â·The
second alternative to these problems is for Target to modify its current
strategy and motto of "Expect more, pay less."Target can add to the message to not settle for less because you deserve
good quality at affordable prices.

oFor:Adding on to the message of "Expect more, pay
less" by telling customers they deserve good quality, and that this quality can
be bought no matter what type of income a customer has.Some customers shop at Wal-Mart not because
they want to, but because they think it's all they can afford.This could give target a chance to tap into a
market segment that Wal-Mart or other low-price stores have not yet tried.

oAgainst:There is a chance that this message will not
resonate with consumers, and they will continue shopping at stores that they
perceive to be cheaper no matter what.It could put Target back at a "square one" position in terms of finding
a way to generate more revenue.

Â·The
final alternative suggests that Target tries to market itself as the "go to"
store.

oFor:Target is known for a place where you can
find innovation and good quality and services, but this may not be enough.Focusing more on the Super Target attributes
such as selling items that Wal-Mart sells could work because Target can
emphasize that they have better quality.

oAgainst:This is a risk because emulating Wal-Mart
could cause serious damage to the Target brand.Target could end up like the other stores such as Bradlees and Caldor,
because these stores also tried to capitalize on low prices while still trying
to appeal to upscale consumers. These stores ended up going bankrupt.

Conclusion

Â·The
best solution for Target is to modify its current strategy and motto of "Expect
more, pay less" by portraying to consumer that they deserve better quality than
they are getting from other stores.The
reason I chose this solution is because it provided the best way to tap into a
new market segment, and it provided the lowest risk.

Â·The
other two solutions both present a chance for Target to either lose its
competitive edge or go bankrupt.

Implementation

Â·The
first thing to do in order to ensure effective implementation of the solution
is to communicate within the company about the current strategy.Integrating all of your departments in the
company creates a better chance for this strategy to work.

Â·Next,
the marketing team should implement in the advertisements the "you deserve it"
line.To best use the phrase, it should
be you deserve to "Expect more, and pay less."The goal of the company is still the same, but now there is an added
element that can motivate consumers to shop at Target.

Â·Continue
to provide great quality and service, because this is a key component of the
message of differentiating Target's quality brand with other stores.

Â·All
of these actions will contribute to future success of this company.